In 1954 the United States Department of Agriculture, in
its Year Book, defined marketing simply and briefly
as “getting the product to the consumer”. This is, however,
not a simple thing to do, especially for farm products, the
marketing of which is influenced by four special factors:

Farm products are usually produced by many producers,
in greatly varying amounts, kinds, and qualities, and
over wide areas of the country;

Most farm products are seasonally produced and are
perishable (milk, for example). Storage, even where
practicable, is costly and needs complex
organisation;

Products are marketed in widely variable forms. For
example, wheat can be sold for stock feed or as bread;
milk can be sold as milk, or turned, by complex
processes, into butter, cheese, or milk powder; and

Demand and supply for most farm products is fairly
rigid, making it impossible to expand production quickly,
as animals have to be reared before this can be done, or
crops grown, or trees planted and nurtured. (Conversely,
no producer will readily reduce herds or flocks or
destroy trees because of a – perhaps temporary – drop in
prices.) Further, people will not necessarily buy very
much more food because the price has fallen.

New Zealand farm products are affected by one other factor
– that most of them are exported to the other side of the
world. Even locally consumed crops, such as grains, potatoes,
most fruits and vegetables, suffer a similar transport
difficulty. The crop may be grain in one island: the grain
demand may be in the other, which adds to the cost and risk
of loss of perishables.

The marketing and pricing system for New Zealand farm
products, though it has varied considerably according to the
product or the times, has, in general, developed from a
laissez-faire free-enterprise philosophy towards one
of centralised control and some measure of price fixing or
stabilisation. This has been a world-wide trend which has
been carried to very great lengths in the bigger industrial
countries, often to the detriment of countries, such as New
Zealand, which depend on exporting farm products.

Any form of price stabilisation or control was never
seriously considered in the early days of organised markets.
Such an idea would have seemed revolutionary, politically and
economically. And, more concretely, the market prices of
export products could not be controlled, nor did the
community have the money to subsidise them. Politicians and
administrators before the First World War would scarcely have
entertained the idea of withholding part of the receipts when
prices were good to cushion later price falls (a method which
then could have applied to wool). It is likely, however,
that, as taxes then were relatively low, New Zealand gained
through the ploughing back of profits into farm improvement
and land development. But farmers were sometimes most
dissatisfied with the violent fluctuations in the prices of
farm products (just as they are today) and whenever prices
fell, they tended to blame the middleman. The dairy industry
was especially dissatisfied; and it is worth noting that
organised marketing has developed most fully with dairy
produce, with pip fruit next, and wheat, the latter being
practically under State control.

Co-creator

How to cite this page: 'MARKETING AND PRICE POLICIES FOR AGRICULTURAL PRODUCTS', from An Encyclopaedia of New Zealand, edited by A. H. McLintock, originally published in 1966.Te Ara - the Encyclopedia of New ZealandURL: http://www.TeAra.govt.nz/en/1966/marketing-and-price-policies-for-agricultural-products (accessed 22 Mar 2019)